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Selling Your Home to Millennials

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | October 12th, 2016

Are you a homeowner in your 50s or 60s who hankers to simplify life by selling your high-upkeep house and moving to a condo? If so, it's critical you consider the preferences of an increasingly important segment of the home-buying market: people in their 20s and 30s.

"The younger buyers absolutely know what they want and can be very inflexible about getting it," says Paige Elliott, a real estate agent who's sold homes since 1998.

"They've done a tremendous amount of research prior to stepping inside a single house. They know the exact neighborhoods they like and the price range they can afford," Elliott says.

With so much pre-screening done by purchasers, she says it's important that sellers make sure their property appears online with plenty of professional-quality photos.

Many agents hire highly qualified photographers to take pictures of their listings and cover the cost themselves. But even if you have to reach into your own pocket for this service, Elliott says it's worth it.

Of course, getting young buyers to agree to visit your place is only half the battle. They must also like its interior. Ashley Richardson, a veteran real estate agent, suggests you consider hiring a "stager," an interior design specialist trained to give properties a more polished look.

Stagers first remove excess furnishings and then rearrange the remaining pieces to give rooms a sleeker, more spacious appearance. To complete the look, they may also lend home sellers a few extra designer items -- like area rugs, decorator pillows or pieces of art.

Nowadays, many real estate agents are taking classes on staging to help their clients. But if your listing agent isn't one of them, and can't recommend a stager, you can hunt for one in your local area through such organizations as the Real Estate Staging Association (realestateassociation.com).

Here are a few other pointers for home sellers:

-- Address your windows.

If you're an older homeowner who's lived in your place for a long while, you may still be using window coverings acquired years ago.

But Sid Davis, a real estate broker and author of "A Survival Guide to Selling a Home," recommends you remove any old draperies. (Windows in your bedrooms and bathrooms can be covered with simple white shades purchased from a home center store.)

Another key to bright, sparkling rooms is to thoroughly clean your windows.

Davis contends that many people who are reasonably fit and don't have unusually high windows can do this cleaning project themselves without hiring a contractor.

"The cost of buying window cleaning supplies is minimal, especially if you already have a ladder. In that case, all you'll need is a painting extension pole, a squeegee and a bucket of water mixed with a little dishwashing detergent," Davis says.

-- Hide your family photos.

There's nothing that will date your place faster in the eyes of young homebuyers than personal photos taken decades ago.

Davis says any personal photos can make it psychologically difficult for young buyers to picture themselves living in your property.

"People of all ages want a fresh start when they buy a house. They lose this vision when they see all your memorabilia," Davis says.

-- Update your bathroom lighting.

In their bathrooms, many older homes still feature Hollywood-style lighting with globes set on a chrome bar. But Davis says such fixtures seem dated to many young homebuyers, who typically want something more stylish and less cliched.

"Look for bathroom lighting with a fresher, more current look. It shouldn't cost too much to replace bathroom lights. Likely you can replace any bathroom fixture for around $100 or so," he says.

-- Count on paint to freshen your place.

One sure bet for adding appeal to your interior is to repaint walls and trim throughout, Richardson says. And she says you're much more likely to appeal to young buyers if you avoid repainting your rooms in the sort of bold paint tones that some agents call "commitment colors."

Instead, she urges you to pick paint colors that are muted, near-neutrals.

-- Renovate your front entrance.

Tom Early, who's worked with hundreds of young buyers during his long career as a real estate broker, knows which updates excite a positive response in purchasers. He says sellers who have a limited amount of cash to spend on upgrades should consider using it to beautify their front entrance, which will enhance the home's appeal to buyers of all ages.

"You can get a good feel for how your entrance looks by walking across the street from your property. If the entrance isn't fabulous, make a change," says Early, who was twice president of the National Association of Exclusive Buyer Agents.

As he says, owners who are serious about selling should realize they can better their prospects with a small investment in improvements to their front walkway, to the landscaping around their front door and to the door itself.

"If painting your door doesn't make it look wonderful, spring for a new door. A wonderful door shouldn't cost you more than $1,000, and it's worth every dime," Early says. (To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

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Tips For a Tough Starter-Home Market

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | October 5th, 2016

In apartments everywhere, young renters are afflicted with a common anxiety: Whether they'll ever get off the rental treadmill to buy a home of their own.

Rising home prices, sizable student loan payments and sluggish improvements in pay combine to make it extremely tough for many young adults to break into ownership. Add to that the reality that rents are high in many communities, making it hard to amass the savings necessary for closing costs and moving expenses.

To make matters worse, the "starter home" segment of the real estate market -- the bottom 25 percent -- now has the fewest available properties, according to Sid Davis, a real estate broker and author of "A Survival Guide For Buying a Home."

Jim Blankenship, a veteran financial planner who's advised numerous young clients on their real estate plans, says, "To afford a home and qualify for a mortgage, sacrifice is often necessary."

Here are a few pointers for first-time buyers:

-- Seek to reduce your debts with extra income.

According to the latest Federal Reserve statistics, overall consumer debt, including car loans, is now relatively stable. But student loan debt continues to soar and now approaches $1 trillion.

For anyone seeking to progress financially, cutting debt -- including credit card balances -- is an absolute must.

"The interest rates charged on most credit cards are ridiculously high. All that interest can eat you alive," Blankenship says.

Unfortunately, many 20-somethings make only enough money to meet necessary living expenses. They're very limited in their capacity to pay off debt or generate savings for a down payment. Given this reality, Blankenship recommends that would-be buyers consider augmenting their income.

"Think about taking a second job. Or try to get overtime at your regular job, assuming overtime is available," he says.

-- Conserve funds by limiting your wedding costs.

Kristin Meador, a real estate broker who often works with young buyers, wrote a book designed to help clients save substantial amounts on their wedding costs, "How to Have a Wedding Without Spending a Dime: Or at Least Very Little."

The book grew out of money-saving strategies Meador developed while helping relatives and friends stage their weddings. It provides pointers on how to cut costs for a range of wedding-related expenses, from invitations to rings to the reception and honeymoon.

"When you're trying to save for a house, it makes no sense to spend $500 or more for a wedding dress," Meador says.

Her book itemizes a number of ways to hold an inexpensive yet tasteful wedding, including having the reception at a lovely local park or community center rather than a swank hotel.

The expense of an average wedding is now hovering around $26,600 -- funds Meador believes would be better spent on a home, assuming the property is carefully selected.

"A lot of parents with money to help their grown kids would rather their funds go toward a home than a fancy wedding," Meador says.

-- Try to slash your discretionary expenses.

Most young adults who live in rental units are very sensitive to their monthly housing costs. But they're typically less aware of how much money they're spending to eat out at restaurants, Blankenship says.

People in their 20s may also spend what he calls "shocking sums" on clothes, as well as entertainment. He recommends that would-be homebuyers comb through a recent month's worth of spending to realize where they could cut back.

-- Consider selling a car to plump up your savings account.

A new or nearly new car is often the first major purchase for many young adults. And usually the car is financed with a hefty loan. But mortgage lenders often frown at the sight of a prospective homebuyer driving up in a late-model vehicle.

"Lenders know that a couple who's financing one or more cars will likely find it tougher to qualify for a home loan," Blankenship says.

Even if you drive an older vehicle and have no car loan, chances are you're paying a substantial amount for car insurance and repairs, not to mention gas.

Blankenship says it's a wise idea for young couples bent on homeownership to ponder the idea of selling one vehicle. Consider public transportation or carpooling as an alternative to commuting alone.

-- Consider the possibility of shared housing on a temporary basis.

Moving in with a family member for a year or so could help you cut rental costs substantially. Perhaps an elderly relative with a large house would let you live there rent free in exchange for help with grocery shopping and trips to the doctor.

Davis says he's worked with a number of young buyers who've obtained substantial savings through a housing-for-services swap.

"You don't have to live with your aunt or another elderly person forever. Just doing so temporarily could help you save sufficiently to pay down enough debt to qualify for a mortgage," he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

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Tips for Buying a Vacant House

Smart Moves by by Ellen James Martin
by Ellen James Martin
Smart Moves | September 28th, 2016

In many popular neighborhoods, there's a significant shortage of fairly priced houses available for sale. But real estate specialists say open-minded purchasers can still sometimes track down a decent deal, even in a sizzling real estate market.

"Hidden gems are becoming further and further between. But they're still out there," says Daren Blomquist, a senior vice president for Attom Data Solutions (formerly RealtyTrac), which follows housing markets all over the U.S.

"There are still deals out there on bank-owned properties that have been in foreclosure for a long time and are sitting unsold and vacant," he says.

Besides bank-owned properties, Blomquist advises bargain-minded homebuyers to consider "stale" houses, properties that have languished unsold for a lengthy period. Often these are homes that have been shunned by potential purchasers because they were significantly overpriced when they first hit the market.

Joseph Schiro, a veteran real estate broker, says the mere fact that a home is vacant for a time can raise suspicions on the part of many buyers.

To assist his home-buying clients considering purchase of a vacant property, Schiro says he often seeks to determine if its owners have an outstanding mortgage on the place by looking at publicly available land records.

"Sellers with a mortgage who were overpriced in the past are usually a lot more motivated to sell than people who own a home free and clear," according to Schiro.

Because vacant property is superficially less appealing to a cross-section of buyers, Schiro says those with the vision to look beyond the must and dust of a vacant place can sometimes do well on price.

"When it comes to a vacant home, some buyers miss out because they lack the creativity to envision its potential," he says.

Here are a few pointers for buyers:

-- Attempt to learn about a vacant home's former occupants.

It's tough to gain details on a house that's been vacant for months, especially if its owners have already moved. It's still harder if the empty property has fallen into the ownership of a bank through foreclosure.

"The bank won't tell you anything," says Merrill Ottwein, a veteran real estate broker and past president of the National Association of Exclusive Buyer Agents (www.naeba.org).

To get the scoop on a vacant property that interests you, your best sources are often neighbors.

"Those still nearby probably know all the skeletons in the closet. They'll spill all they know and tell you if the people who lived there kept up the place before they moved out," Ottwein says.

Most people who must leave due to foreclosure don't deliberately damage their home. Still, their financial problems could mean they lacked money for crucial maintenance chores during their tenure in the property, he says.

-- Don't rule out a "pre-inspection" of a vacant place.

Perhaps the property you like has gone unsold for so long that you're nervous about hidden defects. In such cases, Ottwein advises you to consider hiring a home inspector to take a preliminary look.

He tells the true story of one of his clients, who wanted to learn more about a single-story ranch-style house that had gone vacant nine months before he spotted it. The house was listed at $50,000 below other comparable homes in the same neighborhood and he was suspicious as to the reason.

On his agent's advice, the client spent $200 for a cursory home inspection. This revealed that the house had a serious crack in its foundation, a very expensive problem to fix.

-- Ensure that the utilities are turned on when the inspection is done.

Dorcas Helfant, the broker-owner of a realty company, says cost-conscious banks that own foreclosed property often shut off utility service to the vacant homes they own, including gas, electric and water. But a lack of utility service poses a challenge to home inspectors.

"It's actually pointless to do an inspection when the utilities are off. You can't tell if the cooling, heating and plumbing are functioning correctly," says Helfant, a past president of the National Association of Realtors (www.realtor.org).

Helfant strongly recommends that buyers always have a home inspection on a vacant property -- if not before their bid is submitted, then after. And even if you have to pay to get utility service restored, she says it's worth the expense.

"It shouldn't be too costly to get the utilities restored for just a five-day period or so," she says.

-- Take neighborhood property values into account before making a bid.

"Before you shape your offer, you and your agent should take a careful look at the recent sales history in your neighborhood. In hot markets, it's imperative that you be extra vigilant to avoid overpaying," Ottwein says.

Ideally, you'll want to examine at least three similar properties that have sold in the immediate area in the past three to six months -- adjusting for differences, such as a larger garage or a second fireplace.

Although you'll want to take a home's condition into account when judging its market value, Ottwein cautions against seeking out-of-proportion discounts to compensate for superficial shortcomings.

-- Don't spend more than you can afford, even for a vacant house.

Brokers like Schiro worry that their home-buying clients, empowered by current low mortgage rates, will one day live to regret spending more than they can afford for a vacant house in a prestige neighborhood just because they bought it at a slight discount.

"No matter the discount, you never want to buy far out of your comfort zone," he says.

(To contact Ellen James Martin, email her at ellenjamesmartin@gmail.com.)

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